Forsyth tax review board adjusts values in second Winston-Salem neighborhood

A Forsyth County board tasked with hearing appeals to property tax valuations approved mass changes to a second neighborhood on Friday before officially adjourning.

The board of equalization and review unanimously approved a recommendation by the tax office to make upwards adjustments to values in Castleshire, an affluent African-American neighborhood adjacent to Winston Lake Golf Course in a sequel to a similar decision last week to make blanket changes in Monticello Park.

The neighborhood stood out because there were no sales from 2009 onward that assessors could use to set values. Tax Assessor John Burgiss said staff decided to make an adjustment across the neighborhood based on changes approved in individual appeals. Staff was challenged by the fact that there are few similar properties in adjacent neighborhood and had to select comparable sales from across the county.

"This represents an extreme degree of difficulty," Burgiss said. "I was searching countywide, which is something we would normally not want to do. I looked at the comps and then we looked at the result of the appeals. Based on that, we made the decision to start from scratch."

The adjustment in Castleshire brings the total amount of value restored through blanket changes to $3.7 million, in addition to almost $1 million from individual appeals by property owners across the east side of Winston-Salem.

The neighborhood is home to several prominent Winston-Salem citizens, including Contract Office Furnishings owner Thomas Trollinger and Chronicle publisher Ernest H. Pitt.

The mass change approved by the board restored $1.2 million in valuation in aggregate to 110 properties in Castleshire, increasing their values by an average of 6.9 percent. The initial revaluation knocked off an average of 21.2 percent of values in the neighborhood, with the approved changes blunting the reduction to 17.3 percent. In contrast, many neighborhoods on the east side and parts of the south side of Winston-Salem lost more than 50 percent of value, and some, such as Castle Heights, hemorrhaged by as much as 75 percent.

Monticello Park, the first neighborhood subject to mass adjustment by the board, is also an upscale black community on the east side, but comparisons end there. Properties in Monticello Park lost 70 percent of value on average in the initial reappraisal. The board's vote to implement mass changes in part of the neighborhood restored $2.5 million in value and whittled the loss experienced by the affected properties down from 46.6 percent to 14.9 percent.

The mass changes in Castleshire did not affect one influential resident, Forsyth County Commissioner Walter Marshall, who represents District A. His home on Kittering Lane dropped in value from $220,800 in 2009 to $200,800 in 2013.

Community leaders from across Winston-Salem who attended the hearing expressed mixed feelings about the board's action.

Carolyn Highsmith, president of the Konnoak Hills Community Association, said she was disappointed that the board did not make any adjustments in a section of her neighborhood where staff acknowledged that a flawed sales comp potentially caused upwards of 100 properties to be undervalued my more than 5 percent.

A racially diverse and mixed income area, the Konnoak Hills area is located on the south side of the city. Highsmith worked with the Ministers Conference of Winston-Salem and Vicinity to help property owners file appeals both to bring relief on an individual basis and encourage the board to take a second look and consider mass changes. Burgiss said the tax office received more than 1,500 appeals in the last few days.

Highsmith said Vice Chair David Shaw did not respond to an e-mailed request for the board to correct values in the affected section of her neighborhood, identified by the tax office as Anderleigh.

"I think the issue is still out there," she said. "They addressed it as minimally as they had to. They have done their job according to the statute, but is what benefits the community the most? I don't think so.

"They've built in the inequity because they changed the highest valued neighborhoods," Highsmith added. "The most motivated neighborhoods appeal. What about the neighborhoods where people didn't get their appeals in because they were taking care of someone who was sick or there was a death in the family? Or they're just trying to get by and they're too busy making ends meet to get their appeal in?"

Burgiss said notices of adjustments were not sent out to Monticello Park residents until Wednesday and that he expects some push-back. Affected property owners will have 15 days from the time they receive their new notices to appeal.

Burgiss also said the tax office received a request from the West Salem Neighborhood Association to consider making global changes to values in the neighborhood, but after reviewing staff's methodology he did not think any changes were warranted.

Friday marked the statutory deadline for mass changes. The board will continue to meet to hear individual appeals.

"Today's the day we need to all feel comfortable," Shaw remarked before accepting a motion to adjourn.

The board also voted in a unanimous decision to allow board member William V. White to bring a report for consideration that would be submitted to the Forsyth County Commission.

"It would talk about the assessment process in a catastrophically changing market," White said. "It would talk about briefly the assessor's outreach efforts during the informal appeals, including public meetings. It would summarize very briefly some of the public concerns. It would talk about in summary fashion some of the neighborhoods that had areas of concern, the county assessor's recommendation that two of those areas be changed, talk about the appeal process, and it would conclude the finding of fact that we followed the statutory provisions all the way through and that mass changes otherwise would have been in violation [of state statute], and basically state that we believe the assessor's office did a good job."

Burgiss said the 2013 reappraisal has been challenging for citizens, staff and the board alike.

"So I appreciate your interest in and looking into what the reappraisal was all about and trying to help us make sure that we have equitable values for all our citizens," he told board members. "I realize that this puts you in a more unique position than has been exercised in the past."

The 2013 Forysth County tax revaluation was the subject of a two-part investigative report published jointly by YES! Weekly and Camel City Dispatch.

Equalization board votes to restore $2.5 million in values to Monticello Park

David Shaw (left) and William V. White, John Burgiss and Michael Pollock

An official panel tasked with hearing appeals to property tax valuations voted today in a unanimous decision to restore $2.5 million to dozens of properties in Monticello Park, an upper-middle income neighborhood that is home to a number of prominent African-American civic leaders such as Winston-Salem Mayor Pro Tem Vivian Burke, along with retired educators and business owners.

The Forsyth County Board of Equalization and Review approved the recommendation to make blanket changes to 51 properties at the recommendation of county Tax Assessor John Burgiss. Many of the properties are larger and newer homes located either on Cumberland Road or nearby. Burgiss said staff determined that three sales in 2012 and 2011 that had been used to set values for the neighborhood were not representative of the houses recommended for adjustment.

The 51 properties affected by the blanket change include homes owned by Jim Shaw, a retired tire dealership franchisee and nonprofit executive who is Mayor Allen Joines' reelection co-chair and the widow of the late Judge Roland Hayes. The previous valuations assigned to the properties represented a 71.2 percent decrease from 2009, while the new valuations reduce the blow to a loss of only 39.4 percent.

"These are extremely large changes," board member William V. White said. "They're based on lack of sales. I guess the concern is, what other neighborhoods do we have the same situation that we're not going to know until we receive the appeals and it's too late to do anything about the remainder of the properties?"

Burgiss said staff looked intently at 14 neighborhoods where residents expressed concern about severe drops in valuation and was still open to making further changes.

"May I suggest a potentially radical action to go further into that?" White continued. "Whenever there's so few sales, there's a situation where those sales may not reflect values even though even though all rules say that they do. What about the concept of asking the appraisers in the field the question of, 'Do you think that this work adequately reflects the values out there, notwithstanding the methodology that we use?' The answer is either a yes or a no. If it's a no, then I suggest going back again and looking at the neighborhood, do what you can, and maybe you can expand the number of sales used outside the neighborhood."

The changes made today follow a decision last week by the board to restore more than a $1 million in values resulting from individual appeals in several east-side neighborhoods that were flagged for review because of community outcry, including Monticello Park, Dreamland Park, Castleshire, Slater Park and Shalimar/Salem Village.

White publicly urged property owners to continue to file appeals through the statutory deadline of June 28 so that the board can get a sense of whether further blanket changes are needed.

"I think what the board is looking for is by the 28th to have a comfort level that a) the right methodology was used, b) in your judgement that's the best we could do with it, and then c) we've gotten the word out about the opportunity for individuals to bring an appeal to us," White said. "That even if they don't plan to be present, it forces the assessor's office to take another look at the property. So their individual properties will be examined even further.... I just want to on the 28th say that Forsyth County, the tax assessor's office and the board have done everything they could possibly do to ensure that every citizen had the right to appeal and we've gotten it as good as we possibly could do it in a less sale than desirable environment."

The staff also addressed the findings of an investigation conducted by YES! Weekly and Camel City Dispatch into the tax revaluation.

Real Estate Division Manager John Potter noted that the investigation raised questions about roughly a dozen sales out of 750 sales reviewed in 55 neighborhoods, and that the staff concurred that six of the transactions were either counted, or in one case discounted, in error. The 750 some sales reviewed in the investigation covered only a portion of the 14,000 qualified sales across the county.

"That's six out of 750 — less than 1 percent," Potter said. "We feel that's a pretty good accuracy score."

Staff acknowledged that the disqualified sales that were used in comp lists to set values for neighborhoods included transactions between family members, sales involving churches and foreclosures.

Appraisal Manager Michael Pollock said he used a methodology known as "trended sales ratios," which compares sale amounts to the 2013 valuation with adjustments made for observed market trends, to determine if the errors would have affected the neighborhood values. In all six cases, with the exception of one that he characterized as a judgment call, Pollock said the errors had no material effect on valuations.

In a neighborhood the tax administration calls Anderleigh, but many residents consider Konnoak Hills, Pollock said removing an incorrectly qualified foreclosure sale reduced the sales ratio from 0.97 to 0.94, where 1.00 is the ideal.

"Generally, we like to be .95 to 1.05 in our sales ratios, but in taking a look at that, that was a 5 percent appealed neighborhood," Pollock said. "Looking at it more, I didn't think I could justify making a change. That's my opinion."

Pollock said that adding an improperly excluded sale in the Cameron Park neighborhood (also known as East Winston) had the effect of changing the trended sales ration from 0.995 to 0.990, and was too small to warrant any changes.

The investigation by YES! Weekly and Camel City Dispatch estimated that the exclusion of the sale reduced values in the neighborhood by about 6 percent. The investigation used a methodology of comparing sales to 2009 valuations and pegging changes to the median value to reach that conclusion.

White alluded to two sales flagged by the investigation involving the use of transactions recorded on quit-claim deeds, which the tax administration deemed to be legitimate for the purpose of building sales comps.

"I have a possible concern about quit-claim deeds," White said. "Notwithstanding what the [NC Department of Revenue] says, I think you have to go all the way to the bottom of a quit-claim deed. You usually can't do it with just the deed."

Pollock said staff concurs, and that in the two cases brought to its attention assessors believe that they reflected true market values and 100 percent interest in the property being transferred.

Burgiss reiterated staff's position that the errors had no material effect on valuations for the neighborhoods.

"The one that potentially comes the closest to that is Anderleigh, and that does put us at an assessment level of 94 percent," he said. "We do like to be between 95 and 105 percent. That's the comfort level — that's the range that we like to be in. Certainly, 94 is not 95, so we can understand the question: Was that enough of a change to warrant a change in the neighborhood? There's 400 properties in that neighborhood. The one neighborhood we did bring, we were asking for pretty big changes on those properties. If we were to look at something like Anderleigh that would be very minor."

Movement to preserve values east-side neighborhoods springs back to life

Virginia K. Newell and John Burgiss

Carolyn Highsmith, president of the Konnoak Hills Community Association, received a boost from the Ministers Conference of Winston-Salem & Vicinity in her quest to build pressure on the county to revise property assessments that drastically reduced values in predominantly black and Hispanic neighborhoods along the eastern rim of the city.

The Ministers Conference rallied residents in a press conference that highlighted homeowners who have experienced substantial markdowns in neighborhoods such as Slater Park and Skyland Park.

The Rev. Willard Bass, president of the Ministers Conference, said he believes the process used by the Forsyth County Tax Department to assess values for neighborhoods that have seen significant reductions in value is flawed, but could not point to a specific cause.

"I think the flaw is there," he said. "We want to know what the matrix is." He added that the tax department should not have used the same approach as it did in the 2009 revaluation, considering that the housing market has demonstrated a significant degree of instability since then.  


Highsmith suggested the decrease in property values found in Forsyth County Commission District A, which covers an urban area of Winston-Salem whose voters are primarily African-American and Hispanic Democrats, might constitute a 21st-century version of redlining. The term refers to a practice by banks in the 1960s to draw a line around certain African-American neighborhoods where they refused to loan capital.

"In 2013, community leaders in county commissioner voting District A are questioning whether their neighborhoods are being devalued so that large real estate developers at a later date can sweep in and buy up these devalued properties at rock-bottom prices," Highsmith said, "or that city and county governments in the upcoming years will not have to pay the actual market price as re-development projects such as major road changes and downtown gentrification projects continue to push east from downtown Winston-Salem."

The press conference took on surreal feel as Virginia K. Newell, a former Winston-Salem councilwoman, railed against the reduction in her property's tax assessment as Tax Assessor John Burgiss sat nearby and listened. Organizers of the press conference did not publicly acknowledge Burgiss or invite him to respond to various complaints, including that staff in his office used grades to arbitrarily reduce values in certain neighborhoods, relied on incorrect square footage figures and passed up the opportunity to inspect the inside of houses that are under appeal.

Community leaders expressed dismay that members of the Forsyth County Board of Equalization and Review said they believe the tax department did a good job on the reappraisal overall, and that they do not see a need for blanket changes to neighborhoods valuations. The board is charged with hearing appeals from property owners who believe that their valuations and incorrect, and has the power to make blanket changes across entire neighborhoods. The community leaders called for the 2013 tax revaluation to be set aside and for an outside firm to come in and review the process used to obtain values.

"We've lost confidence in the system," Bass said. "We'd like to have integrity returned to the system. We hope that the questions we've raised will leave the door open for the some justice and equity."

In the meantime, organizers are urging property owners to file individual appeals, both to address the problem on an individual level and to let members of the board of equalization know that there are systemic issues with how the revaluation was completed. Bass urged audience members to help get the word out that volunteers will be on hand at local libraries this weekend to help property owners file appeals.

Newell said some of her neighbors in Skyland Park are happy with their valuations because their tax bills will be reduced.
  
"But I don't feel that way," Newell said, "because if my property were to be sold I would have spent a lot of money and invested in it and then it's gone. And I don't think people understand that. Because if the houses on Pickford Court and that area [in Newell's neighborhood] are not raised the way we think we have improved them, then my property — though it might sell — it would still not be worth what we have put into it — the investment. And basically property, for poor people, your home is about the only thing you've got with any amount to leave to your legacy — your family and your children. And if you take that away, what's left?"

Forsyth County tax panel will not meet with residents in community

A volunteer board appointed to hear appeals to property tax valuations in Forsyth County reversed position on May 30 when members said they are no longer interested in scheduling a meeting in the community to hear directly from residents in neighborhoods affected by plunging home values.

The decision angered Joycelyn Johnson, a Skyland Park resident and community leader who is running for Winston-Salem City Council. Johnson had also asked members of the Forsyth County Board of Equalization and Review to personally visit homes in affected neighborhoods that have lost as much as 70 percent of their appraised value to see firsthand their quality of upkeep.

Johnson and Tax Assessor John Burgiss engaged in a heated discussion about economic-functional obsolescence, an instrument the appraisers in the tax office use to reconcile a cost-based assessment of what properties are worth with market activity.

  

“That’s the institutional problem you have — is you have neighborhoods with economic-functional obsolescence of 75 percent. When you tell me my home is only 25 percent functional, you’re devaluing my neighborhood. I doubt very seriously that any of you have. I doubt very seriously that any of you lost more than 50 percent of the value of your house.”

Johnson was one of only three members of the public who attended the meeting. Since the board convened in early May, its meetings have been poorly attended, in contrast to mass meetings held in churches by the Ministers Conference of Winston-Salem & Vicinity, the Rev. Paul Lowe and Winston-Salem Councilman Derwin Montgomery in March when residents first received notification of their assessments.

“System-wide you have certain neighborhoods where you had no sales, or you had foreclosures, or you had few sales nearby,” said Carolyn Highsmith, president of the Konnoak Hills Community Association. “It feels like you’re penalizing 115 or 215 properties in an entire neighborhood. I think the data points are too small for the samples to devalue hundreds of parcels.”

Chairman Richard N. Davis, who has been the most vocal advocate for addressing neighborhood-wide complaints on the board, was not present for the meeting. Board member Marybeth Abdow was also absent.

Vice Chairman David Shaw said he believes the best way to address any perceived problems is to submit evidence of any errors through individual appeals.

Burgiss said the tax department has received no information to indicate any “widespread data problems.”

The board has scheduled two additional meetings, on June 13 and June 20, before it is statutorily required to make any blanket changes to neighborhood valuations on June 28. On Thursday, June 13, the board will begin hearing individual appeals from property owners in Monticello Park and other neighborhoods under scrutiny because of severe reductions in values.

Board of equalization looks at tax appraisals in neighborhoods with plunging values

John Burgiss

Members of the Forsyth Board of Equalization and Review debated how they should address deep cuts to property valuations in Monticello Park and other predominantly African-American neighborhoods of Winston-Salem on Thursday.

The volunteer citizen board, which is comprised of real-estate professionals appointed by the county commission, is tasked with hearing appeals to property valuations and making mass adjustments if they find systemic problems in the recent reappraisal by the county tax department.

Board member William V. White expressed doubt that the board will uncover any evidence of error sufficient to justify the kinds of mass changes sought by residents of neighborhoods who have seen their home values plunge by as much as 70 percent. 

“In aviation there is a concept called ‘slope line’ to where when you slow the air speed down to the point where the controls get kind of dysfunctional and mushy,” he said. “And it sort of likens to a valuation problem with no sales. I think we are victim of general economic conditions and few sales. But I don’t see any compelling reason to do anything different. I think you’ve got to follow the sales. I don’t see significant problems with it. I know it’s not what everybody wants to hear. I do have some concerns about a shoot-the-messenger reaction.”

John Potter, real estate division manager for the tax department, reviewed sets of qualified sales used to set appraisals for properties in Monticello Park, Konnoak Acres, Shalimar/Salem Village and Reynolds Park.

Due to the wild fluctuations in the real estate market between 2010 and 2011, Tax Director John Burgiss told board members that staff relied on sales from 2011 and 2012 to compile qualified sales lists, commonly known as “comps,” for each neighborhood. Neighborhoods with high numbers of foreclosures, which are excluded from consideration, also had low numbers of qualified sales. Narrowing sales to 2011 and 2012 further winnowed the list.

There were only three sales on the comp list that were used to set values in Monticello Park.

In one, a woman represented by a power of attorney sold a brick ranch house under a generous tree canopy that had been previously valued at $114,300 to a couple for $32,900 in September 2011. In November 2011, seven heirs of William Nelson Knight sold a handsome, split-level ranch house previously valued at $184,000 to Carrboro couple for $82,000. And in November 2012, an investor from Maine picked up a house for $27,000 in a second estate sale. The property had previously been appraised at $120,000.

Chair Richard N. Davis challenged the use of estate sales to determine values for the neighborhood, noting that in his professional experience heirs often sell below market value.

“The heirs didn’t put any money into the purchase of the house, so everything they get is gravy,” he said. “And some people want money. And if it’s a $150,000 house, they get an offer for $65,000 or $75,000 and they say, ‘Let’s sell.’ In a case where it’s multiple heirs, you can’t say it’s majority wins. Everyone has to agree. They put pressure on the one who is holding out, and say, ‘We need the money.’ So I don’t personally think an estate sale should be an indication of a market-value sale.”

Burgiss interjected that, in fact, the tax department does consider estate sales in its comps, in accordance with the state law governing tax appraisals.

“I don’t mean to be in conflict with you, but we are in compliance with Department of Revenue standards,” Burgiss said. “I just want to make sure we’re on the same page.”

Vice Chair David Shaw said he doesn’t relish hearing individual appeals from property owners in Monticello Park.

“What disturbs me is we’re going to have to make decisions based on such limited information,” he said. “In that one neighborhood we’ve only got three sales, maybe one or two are questionable as estate sales. It’s going to be real tough to work through this.”

Board members approved a proposal by Burgiss to front-load the individual appeals from Monticello Park and other troubled neighborhoods so that the board can make any mass changes deemed necessary before a June 28 deadline.

Potter said the dearth of qualified sales presented challenges to appraisers in Monticello Park.

“It’s not something that was easily done all the time,” he said. “Our objective is to show you how it’s done. But that’s what an appraiser has. And when he walks away he’s got to match that to a sale that’s out there. So whether it’s up or down, or way down, that’s what the appraiser is charged to do.”

Davis inquired about a number of sales in neighborhoods such as Reynolds Park and Shalimar/Salem Village that had been cited to him by concerned property owners. Potter said that they were bank sales and were appropriately excluded from the comps.

Board members also looked at how close the recent 2013 reappraisal tracked with market sales in several of the neighborhoods flagged for review. Staff presented average sales ratios, which compare appraised values to actual sales, for that purpose.

“Konnoak seems to be right on the money,” Davis said in reference to the sales ratios presented by staff. “It impressed me as being more accurate than any of the others.

“Some of the others I had problems with,” he added.

Davis cited a decision by the Mecklenburg County Commission to bring in an outside firm to review the 2011 tax revaluation and asked Burgiss if he saw the situation in Forsyth County as comparable. In Mecklenburg, some property owners in the Cornelius area complained that their assessments were too high. The outside review commissioned by the county found instances of erroneous data that had “a significant impact on the valuation” of whole neighborhoods, including sales that should have been excluded from comps and misapplication of grades to individual properties.

“Eighty-five percent of the public regarded public relations [by the Mecklenburg County Tax Department] as poor,” Burgiss said. “I can’t speak for the public, but we don’t have that problem here.”

Davis expressed disappointment that staff was unable to report how many informal appeals in the troubled neighborhoods had resulted in valuations being changed.

“In my opinion the whole idea behind this is to find out where we were, how we stood,” he said. “And I would hope one of the objectives of the effort would be to. ‘Okay, we did this. Here’s how we came out. We adjusted some higher.’ I mean, what’s the use of doing this study if you don’t know the outcome? This is the thing that disappoints me: We did this to put our hands on the problem, and yet we don’t know the results of it.”

Shaw and White suggested that the board take a look at sales after Jan. 1, 2013 — the legal cutoff point for the revaluation — to see if they’re relatively aligned with those used to set values, particularly in neighborhoods such as Monticello that are challenged by limited samples. The two board members acknowledged that only sales from 2009 to 2012 can be legally applied for the purpose of setting values.

“I would feel more comfortable in that neighborhood if we knew how many houses are on the market and how many sold in the last six months,” Shaw said. “I think it would certainly be an indication, and it would make me feel good that, hey, these valuations are right.”

Burgiss responded that he can provide any information board members want, but added that the values are assumed to be correct and the burden is on appellants to prove that they are incorrect.

Davis said as he reviews individual appeals he will be mindful that overall values dropped by 11.9 percent across the county, and measure some of the troubled neighborhoods against that metric.

“Some of these homes that dropped 65 or 75 percent just because they happened to be in a neighborhood where there was a problem, we ask ourselves a question: Is it fair to that homeowner because he just happened to live in that neighborhood that their values dropped so drastically?” he asked. “That’s the question, is how we deal with it and treat everybody equitably, treat everybody fairly.”

Equalization board undertakes review of extreme markdowns in black neighborhoods

Tax Assessor John Burgiss responds to questions from the board of equalization

Members of the Forsyth County Board of Equalization and Review committed to undertake a systematic review of tax reappraisals in troubled, predominantly African-American neighborhoods that have experienced an extreme markdown of values over the past four years.

The volunteer board, which is appointed by the county commission, faces a June 28 deadline by state statute to make any mass changes to property values.

"A lot of people are looking to this board to solve this problem," Chairman Richard N. Davis said during a regular meeting of the board today. "And we need to start coming up with some ideas on how we are to proceed to resolve some of these problems. I think the problem is so broad that we can't solve it on an individual basis. I think there are certain neighborhoods that have been severely affected by this that perhaps we might need to direct the staff to look at the entire neighborhood and come back and give us what they find."

As the sole African American on the five-member board, Davis has been bombarded by phone calls from concerned property owners on the east side of Winston-Salem at the urging of a group of pastors who led a series of community meetings a couple months ago. While expressing skepticism towards concerns about systematic error by the tax office, the other four members gave a respectful hearing to Davis' argument that the board needs to thoroughly examine tax data to address citizens' concerns.

"There is a feeling that the county is arbitrarily lowering the value of black neighborhoods," Davis said. "They look at this as disenfranchisement. A lot of these people, their homes are the most valuable thing they own. And some of these people have mortgages on their homes. And they have a house that used to be valued at $180,000; now that house is valued at $79,500. And so they've lost $100,000 in value. They have a mortgage of $120,000. The mortgage company is saying, 'Hey, you're underwater as far as we're concerned. Your house is now worth much less than what you owe on it. And you got to pay us more money or we're going to call your loan.'"    


Forsyth County Tax Assessor John Burgiss defended his staff's work.

"We believe that we have done everything right," he said, adding that all of the data is available on the tax department's website for people to review. 

"We want the right answer," Burgiss said. "All we want is to have an equitable distribution of taxation."

Board member David Shaw said he believes the reductions are most likely the result of economic realities rather than any error on staff's part.

"I don't have any prejudgment or pre-opinion," he said, "but I can tell you as a realtor that's on the street, what I see is that this thing is more nearly right than not." 

Davis said a news reporter tipped him off about a sale in which a house was sold at an auction and the buyer bid at $65,000, paid $25,000 down and then paid the balance of $40,000, adding that the county used both the down payment and the balance payment as qualified sales in its comparative analysis to arrive at appraisals for the entire neighborhood.

"We've got to make sure that some of these houses that's been severely devalued, we've got to make sure that we've got evidence to prove that the value the county placed on it was justifiable — that the county did not use disqualified sales in their comparisons," Davis told Burgiss. "I just want to throw some of those things out to put you on guard that some of those things are coming out and the county needs to be prepared to deal with it."

Burgiss responded that he would like to know those specific sales so his staff can look into the matter.

Board members asked staff to bring them data on several neighborhoods where they have either received complaints or observed severe drops, including Monticello Park, Castleshire, Northwood Estates, Cameron/Cleveland Avenue and Reynolds Park Road.

Davis cited an instance when a homeowner sold a house for $45,000 that had been previously valued at $169,000 because he was threatened with foreclosure if he didn't come up with his mortgage payment. Instead, he found someone to buy the house at a deep discount to avoid foreclosure.

Transactions resulting from a foreclosure or transactions that involve a lending institution are among those that the tax office excludes from its list of comparable sales. Not so for what are known as "short sales," which take place when a seller finds a buyer to preempt foreclosure.

"Short sales will cause us a little more problem to detect," Burgiss said. "Part of the decision that I made was to not expend the staff effort to try to locate short sales."  

Board member Marybeth Abdow said she doesn't believe it's practical for the tax department to go through every single sale to try to spot short sales.

Board member William V. White suggested that some of the troubled neighborhoods might have suffered from reductions in value because of what he called "downstream" sales in which a bank takes back a foreclosed property and sells it to an investor, who in turn makes minor, cosmetic improvements and sells it for a profit that is still well below its previous valuation. Davis submitted another term to describe the phenomenon: "Contaminated."

"I don't think there's any practical way to track these sales," White said, "and I don't think there's any statutory way we can count that as anything other than a qualified sale."

Burgiss acknowledged that if the county included bank sales in its analysis, the values of neighboring properties could be artificially depressed.

"We say, 'If it's wrong, then let us know,'" he said. "And if we can understand and verify what you're saying, we'll adjust it. If that happens and if there's enough errors in an area of course that could change the values derived from analyzing the market if you change the sales that you use. So we understand that. We're open to that. We know that if you change enough of those sales, then you change your answer."

Davis said  he once worked at Wachovia Bank and that at one time the bank refused to lend in certain "red-lined" areas of Winston-Salem because property values were so low the bank didn't deem them as worthy of investment. The legacy of disenfranchisement from such historic practices makes it imperative that the board of equalization avoid any perception that it's practices are historic inequity, he suggested.

"We're going to have to come up with some way to let these people know that this is not a systematic thing on the part of the county or anybody else to take value out of their property, that these things happen because of economic conditions," he said. "But what we've got to make sure of, is that the value on these homes was not reduced because of sales that should not have been included in the comps. We're not supposed to use distressed sales. We're only supposed to use fair-market, arms-length transactions. And we need to make sure this is the case. We need to look at these homes and we need to look at these neighborhoods and see if we're justified in the low values that some of them have."

WANNA GO? The Forsyth County Board of Equalization and Review is still deliberating on whether to allow public comments at regular meetings, which are typically scheduled every Thursday at 3 p.m. But the board will hold a special meeting on Monday, May 13 at which they will allow citizens to speak for five minutes. All meetings take place in the Board of Equalization and Review meeting room on the first floor of the Forsyth County Government Center, located at 201 N. Chestnut St. in Winston-Salem.